Attrition rate falls down to 15-20% in IT-BPO sector: ASSOCHAM

The apex industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), has reported that the attrition rate in IT-BPO sector had fallen drastically. According to the body, the level of attrition has come down to 15-20% in the last six months for the year 2012 when compared to the 55-60% attrition rate in same period during the year 2011.

As per the recent survey carried out by the apex body, the level of attrition rate has been falling by 45-50% from period of January to June mainly due to the downturn in the global economy. According to the report, slow growth of the economy coupled with weakening rupee against dollar has made the employees in the BPO sector to adopt a wait and watch policy before moving out from the current job position. Nevertheless, this policy adopted by the employees proved to be a boon for the IT/ITES as the sector has been grappling due to talent shortage in the middle and senior level management.

The industry body as part of their survey interacted with consultants, HR professionals, psychologists and managerial officials of various companies from six leading centers of IT-BPO sector in India. Many of the respondents gave economic slump as the reason for the slowing down of hiring activities and increasing retention rate at all levels of management in BPO companies. They further said that the slowdown has been also forcing the other companies to consider only a mere hike in the annual appraisal season which doesn’t have much incentive to employees looking to jump from current jobs.

Most often, attrition in the IT-BPO sector happens mainly in quest of

High pay packages

Better career opportunities and growth prospect

Better management relationship and

Avoid performance pressure.

But, according to the survey, decline in attrition rate will prove to be fruitful for the companies which are struggling as expenses incurred on recruiting new staff and training them on the skills sets has fallen considerably.

According to ASSOCHAM, the fall in attrition rate is beneficial as frequent change in the job can be fatal for the growth of the BPO sector in India. The report claims that high attrition rate affects both the companies that pay high pay packages and for the individuals receiving those high pay since high pays do not raise the level of skills and talents of the individuals.

Further the report also discusses that the attrition rate is maximum among the entry level employees due to their aspiration for hefty pay packages, whereas the rate is minimum i.e less than 5% for the employees having work experience for more than 10 years. The rate of attrition is 7-10% among the employees having experience between 5-10 years.

However, according to the report, the companies are planning for salary hikes and promotions to keep a check on the attrition rate and to further lower the current rate.

Latest Columns

The core of WEBCON is a group of highly qualified specialists who for many years have been involved in designing and implementation of workflow systems (DMS) and optimization of business processes (BPM). As a team we also have extensive experience in designing and implementing ERP and Business Intelligence systems as well as solutions that support team […]

December 12, 2011: RuralShores Business Process Outsourcing plans to start 100 rural BPO delivery centers which will add 10,000 seats to its capacity in the next three years. It is said that the new centers will be started in the Northeastern part of the country. RuralShores has now launched 10 rural delivery centers across seven […]

Categories

Columns

The recent theft of $45 million from two Middle Eastern banks has put top ATM outsourcing companies under the scanner once again. Apparently it was a security breach at two Indian companies that processed credit payments, which led to the theft. ATM machines were robbed that has raised the question of security with regard to […]

Research Reports

Spending on IT outsourcing (ITO) services worldwide is likely to surpass $ 251 billion in 2012, according to the new research report by Gartner. Gartner, a leading information technology research and advisory company, in their research report titled “”Forecast Analysis: IT Outsourcing, Worldwide, 2010-2016, 2Q12 Update” claimed that spending on IT outsourcing services will grow […]

Knowledge Base

Business organisations world over in their pursuit of growth are looking at various strategies. Some companies are trying to grow organically whereas the others are trying to do so inorganically. The relevance of BPO companies in this context is very high as these companies help the clients in cutting down their cost. BPO companies now […]